Legal Affairs Reporter for The Age

Police Chief Commissioner Ken Lay has been ordered to pay more than $500 in legal costs after police mistakenly charged a man with burglary.

A police officer wrongly identified Richard Toal as a man featured in CCTV footage of the burglary, which was circulated among police.

Mr Toal was also wrongly charged with theft and deception and held in remand overnight on Wednesday.

Upon closer inspection, the officer realised on Thursday Mr Toal was not the alleged burglar.

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Police withdrew the charges against him in the Melbourne Magistrates Court on Thursday after they realised they had arrested the wrong man.

Police prosecutor Senior Constable Giovanni Lazaro called it a case of "mistaken identity".

Chief Magistrate Peter Lauristen ordered Chief Commissioner Lay to pay $565 to Mr Toal's legal aid lawyers. He said that if the case had gone to trial, where Mr Toal would have been acquitted, Victoria Police would have had to pay costs.

"What's the difference?" Magistrate Lauristen asked.

Senior Constable Lazaro argued the Chief Commissioner should not have to pay costs because the officer involved had "not acted unreasonably" in mistaking the man's identity and the matter had been brought to the court's attention as soon as possible.

But Magistrate Lauristen said it was "inarguable" that the Chief Commissioner would have to pay, and gave him three months to do it.